units are inspectedat 90 % stage failure mateials are added before inspection spoiled units have no salvage value and are considered an internal UNITS beginning inventory 5,000 started this month 20,000 transferred to next department 18,000 spolied 3,000 endining inventory ( 100 % materials, 60 % labor & overhead) 4,000 COSTS Beginning inventory: materials $ 1,260 $10,761 labor $ 789 factory overhead $ 1,789 Added during month: materials $ 36,240 labor factory overhead $21,311